The two firms have conducted a role reversal over the terms of the deal, by pushing Resolution forward as the offerer. This means that Resolution just needs to garner a straight majority of shareholders with Friends needing some 75 per cent to approve the creation of the firm.
The move comes at a time when Pearl is looking cocked and ready to launch a rival bid after getting FSA clearance to garner 20 per cent of Resolution. Pearl director Hugh Osmond has seen the firm build its stake up to 16.5 per cent, with 25 per cent needed to block the merger.
This can still happen, as the group is believed to be looking to tie-up with other insurers to block the deal, but it looks all the more unlikely as both Friends Provident and Resolution look to push through the deal as soon as possible.
So what is the next step? Resolution is set to announce its interim results next Tuesday which could possibly trigger Pearl, and other suitors, coming out of the last chance saloon with all guns blazing.
However confidence seems high in both camps of the merger, as the firms have also highlighted areas of the business they will look to “accelerate” upon its conclusion.
Resolution group chief executive Mike Biggs says the move reflects the commitment of both firms to the formation of Friends Financial.
He says: “The restructuring of the merger is in the best interests of our shareholders as a whole, as it allows the transaction to proceed without disruption, in the absence of any competing offer for Resolution.
We remain relentlessly focused on maximising value for shareholders and nothing in this restructuring will inhibit anyone from making such a competing offer.”
It seems to be put up or shut up time for Pearl and all the others who want to break up Friends Financial before it even gets started. Resolution and Friends Provident pitched their tents some time ago and both look ready to start building, as is indicated by acquisition of Abbey for Intermediaries by Resolution.
What happens internally is a completely different story with fund managers in both firms’ asset management camps waiting with baited breath.